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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

A difference of opinion over a hybrid instrument arises between SEBI and RBI. Who may make a reference to the Joint Committee under section 45Y(3) of the RBI Act, 1934?

The SEBI Chairman may make the reference. Under section 45Y(3), only the RBI Governor, the IRDAI Chairperson, the SEBI Chairman or the PFRDA Chairperson can refer a difference. The Finance Ministry Secretaries are members, and the DFS Secretary convenes meetings, but they cannot refer.

  1. AThe Secretary, Department of Financial Services, as convener
  2. BThe Secretary, Department of Economic Affairs
  3. CAny issuer of the instrument concerned
  4. DThe Chairman of SEBI, being a Member under clause (f)Correct

Explanation

Section 45Y(3) allows any Member under clauses (b), (e), (f) or (g) to make a reference. These are the RBI Governor, the IRDAI Chairperson, the SEBI Chairman and the PFRDA Chairperson. The two Secretaries are Members under clauses (c) and (d), and the DFS Secretary is only the convener, so neither can make a reference.

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